The Democratization of Fresh
The dust may never settle around Amazon’s Whole Foods Market Acquisition, but some exciting implications are starting to become clear.
Until now, the way that consumers eat, and their access to quality, healthy food has largely been determined by economic status. Those with higher incomes eat higher quality, fresher food. Lower income means lower quality and more processed foods but things have been changing, slowly but surely.
One of my favorite brand founders, Annie’s Homegrown President, John Foraker, believes that this acquisition has the power to defeat food deserts, locations throughout the country where nutritious and fresh food is very difficult to obtain. According to Foraker “The thought of Whole Food’s mission combined with technology and the ability of a company like Amazon to help conquer some of the last-mile issues that have prevented access and distribution into really difficult places seems like a golden opportunity, I couldn’t agree more.
I believe the “Fresh Food Takeover” will be accelerated by this acquisition and that many legacy brands and newcomers will be affected by Amazon’s deal, some positively, and some negatively. Bloomberg reported that Amazon would like to change the overpriced image that Whole Foods Market represents, which means That “Whole Paycheck” won’t be whole for much longer. It also means the competitive pricing between brands will definitely be fierce. Analysts estimate that more than 50 million Americans, use Amazon Prime. Their merge with Whole Foods Market is a huge opportunity to bring fresh food to the consumers who’ve couldn’t afford it before.
This deal is going to mean wonderful things for consumers but what will it mean for legacy brands?
Legacy Brands Will Lose Share to Smaller Brands
Our recent webinar went into great detail on this hot topic. As a result of this merger it will be easier for consumers to make the jump to smaller, healthier brands. Leaving legacy brands like Unilever, Kraft Heinz, Campbell Soup, and General Mills in an even more precarious position than they already are. Many “little guys” have already reached the health-conscious consumer radar in a big way, and this partnership could lead them to mass distribution that goes beyond their wildest dreams. And the demand is definitely there. Look at success stories like Noosa, a brand that quickly went from being sold in zero to 25,000 stores. Justin’s Peanut Butter started out small but they were soon purchased by Hormel for $286 Million. Amazon’s intent to make the Whole Foods’ products more affordable will make it possible for many more consumers to make fresher, cleaner choices.
Smaller CPGS- Be Wary of the Fresh Food Takeover
Amazon CEO, Jeff Bezos has fully embraced organics and natural foods, and us marketers are learning it’s not a passing trend. Analysts predict that this merger will have also have Conagra and the mid tier companies scrambling as they get squeezed even more by competition from the more natural brands from above and private label from below.
The good news in all of this-food will get fresher and better for all consumers, but the competitors are going to need revise their strategy or risk becoming irrelevant.
Is your brand feeling pressure from the acquisition of the century ? If the answer is yes, then let’s talk. I know I can help.